3 Ways to Improve Ecommerce Customer Retention

As a business owner, you’ve probably heard the commonly touted fact that keeping your current customers is much less expensive for your business than finding new ones.

It makes sense. You tend to have much greater marketing spend to bring on new customers, then you often have to work at getting them to trust you before they will decide to make a purchase.

Your current customers (hopefully!) already trust you. They know what to expect and they are already safe in the knowledge that, last time, they got what they paid for. Here are a few things we know about repeat customers:

• They tend to spend more.
• They aren’t as price sensitive.
• They may become “brand advocates.”

A Harvard study also found that increasing your customer retention rate by just 5% can boost profits between 25% and 95%. Perhaps if you became better at retaining your current customers, you may not need to spend as much on marketing for new ones.

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We wanted to know how some of the most successful ecommerce stores work on retaining their current customers — here are some strategies we’ve found:

#1. Make Customer Service Easy

When you spend money with someone, you want any customer service interactions to be simple, right? Apply that to your own business. Do you have any points of friction in your process? Anything like that can be enough to put customers off from returning.

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Here are some ideas for making your customer service experience easy on the customer:

Self-Service Options

If you’re in ecommerce, you probably do have self-service options available, such as to update account details, but how easy have you made them to find?

So many sites have confusing interfaces when it comes to wanting to update those simple details. If you’re greeted with no obvious options, you’re probably then going to look for a “contact us” form or an email address. After that, there’s a chance that you wait a good period of time before someone gets back to you.

Today’s busy customer would much prefer “quick and easy.” Customers’ demand for better self-service experiences, as well as expanded channels for self-service (Web, SMS, mobile), is driving higher investments in this technology” (CIO).

Use Social Media

There’s good reason to be using social media to address customer service; it’s where your customers are and what people are demanding.

Research from JD Power shows that an estimated 67% of consumers turn to social media when they’re seeking customer service. In fact, if you’ve set up a Facebook page for your business, you’ll notice that they grade you based on your responsiveness to customer questions and let page viewers know what your average response time is.

Being responsive on social media is not only creating an easy channel for the customer, but it’s helpful for generating trust in your business. You’ve probably had an experience before where you’ve wondered if customer service is just slow, or whether they’re deliberately ignoring you. Well-monitored social media channels can help put you ahead of slower competitors!

#2. Delivery Experience

Ok, so once a package has left your possession (or your warehouse), you are no longer in control of every aspect of what happens with it. Third parties will never have as much interest as you do in upholding your standards, and there’s little you can do there.

For the customer, this is often the period of heightened anticipation or even anxiety. Where is my package? When will it get here? Customers want to feel assured that what they’ve paid for will safely be delivered.

Keeping them updated with reliable tracking information is a great way to ease any fears and to promote trust. (Tip: If you’re using a product like Shipstation to centralize your shipping, you can have tracking numbers automatically sent out).

Zulilly uses Facebook messaging to keep customers up to date, as well as the more “traditional” email.

Aim to give your customers delivery information that is as accurate as possible. There are a number of reasons they may want to know when delivery will be. For example they might not feel their package will be safe left outside or the package might contain items which could be affected by sitting in hot or cold weather. Empathize with your customer and do your best to meet what they need.

Packaging and Presentation

There is nothing more disappointing than ordering something online, only to have it arrive in less-than perfect condition due to the way it was packaged. Some conditions may be unavoidable (like items susceptible to sitting out in the heat), but you can take steps to minimize damage.

It is always tempting to keep costs as low as possible and go cheap with your packaging — don’t! Quality packaging will help your products to remain in top condition and hopefully reduce your return (and customer dissatisfaction) rates.

Look for packaging which will protect your products well, including things like insulation wrap for those heat-impacted items. Make sure anything delicate has plenty of cushioning.

Presentation of your products is where you can really add some “wow” for the customer. You know all those unboxing videos now on YouTube? This is what people are looking for, an “experience” with the arrival of their package.

Just check out the Dollar Shave Club box below — that thing is an art form! It helps to promote their brand and drive excitement among customers. Many will take pictures and share on their own social media accounts — giving you, the business owner, some free exposure.

If you can provide consistently exciting unboxing experiences, the chances are your customers will be back.

#3. Persuade Customers to Register

Notice we said “persuade” and not “compel?” Attempting to make user registration a requirement in order to make a purchase is a known cause of shopping cart abandonment, losing you the customer in the first place. Never mind any possible repeat purchases!

User registration has obvious benefits for ecommerce store owners. You get to know your customers better and can segment them based on their habits and, of course it allows you to stay in touch with them.

Sales and offers are powerful ways to encourage customers to return, but you have to be able to let them know in the first place!

Ok, so how can you persuade customers to register for an account with you? Here are some ideas:

• Make the actual registration easy, for example via Facebook, or at least through not requiring too many things from them.
• Impress upon the customer how registering will make future checkouts very quick and simple. Think of the Amazon experience when you shop as a registered user and can checkout with one click.
• Offer an incentive for registering. For example “get a coupon code for 15% off your next purchase.”

Another thing to remember here (and going back to our thoughts on making self service easy), make sure that you don’t have too many barriers in place should a customer forget their account password.

Your customers don’t want to decipher the DaVinci Code to be allowed back into their account — it should be as simple as them entering the email address associated with their account and receiving a forgotten password email with a link. Don’t make them jump through hoops!

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Final Thoughts

Customer retention should be an important focus for all ecommerce businesses. You don’t want to be plugging a leaky business by spending more and more on marketing for new customers.

Repeat customers can represent huge increases in revenue for your business and often become advocates for your brand. Give them easy customer service experiences, excellent delivery and presentation and the incentive to create a user account.

These are just three of many possible strategies you could use to improve your customer retention. Let us know which ones have had the best results for you!